Goldman says $200 oil. Lehman says $80. Forbes

analysts at Lehman make a strong case for falling prices as the markets absorb bearish signs such as the Chinese stockpiling oil in advance of the Olympics, and the estimated 28 million barrels Iran is storing in tankers because it can’t find a market for the heavy, difficult-to-refine crude. “If those 28 million barrels were in U.S. crude stocks, the market here would be a lot looser,” said James Crandell, an energy markets analyst at Lehman.

A key assumption…is that the Saudis will increase production after the election to curry favor with the new president and try to influence policy in the Middle East. While Saudi Arabia guards its oil production and reserves as state secrets, the nation has recently announced three long-awaited oilfields have begun production. Lehman estimates those will add 1.3 million barrels a day of capacity, compared with expected global demand growth of 900,000 barrels a day.

If the Saudis open the spigots, in other words, crude prices would drop, just in time for the desert nation to gain influence over whoever takes residence in the White House. “There’s a history of output increases, not exactly coinciding with the election but a few months afterwards,” says Crandell.

Meanwhile, here’s a story of a high performing hedge fund that lost $17 billion in a few days last year due to its exposure to mortgages. That couldn’t happen in the oil market, could it? Almost everyone is bullish. Even the bears talk about an $80 floor for oil.

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